Forbes Medi-Tech Announces Sale of Pharmaceutical Assets
Company Focuses on Building Its Revenue-Generating Nutraceutical Business
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 18, 2008) - Forbes Medi-Tech Inc. (TSX:FMI)(NASDAQ:FMTI) ("Forbes" or "Company") announced today the sale of its pharmaceutical assets and business unit based in San Diego, California to Transition Therapeutics Inc. (TSX:TTH)(NASDAQ:TTHI) ("Transition"). Terms of the sale include an upfront payment of US $1 million in cash paid at closing to Forbes along with potential future payments of up to US $6 million, in cash or Transition shares, based upon Transition reaching certain developmental and regulatory milestones as outlined in the agreement.
Forbes originally acquired these pharmaceutical assets in October 2006 as part of its acquisition of Therapei Pharmaceuticals Inc. ("Therapei"). In May 2008, the Company outlined restructuring plans to focus on its core nutraceutical business and discontinue pharmaceutical development activities.
"As highlighted in a recent news release, this initiative will reduce the company's burn rate while allowing Forbes to clearly focus on further developing its nutraceutical business - through both organic growth and M&A initiatives within the functional food and dietary supplement markets," said Charles Butt, President and CEO of Forbes Medi-Tech Inc.
Of the amounts received from this transaction, Forbes will pay 20 percent to the former Therapei shareholders, in cash and common shares of Forbes.
About Forbes Medi-Tech: Forbes Medi-Tech Inc. (TSX:FMI)(NASDAQ:FMTI) is a life sciences company focused on evidence-based nutritional solutions. A leader in nutraceutical technology, Forbes is a provider of value-added products and cholesterol-lowering ingredients for use in functional foods and dietary supplements. Forbes successfully developed and commercialized its ReducolTM plant sterol blend, which has undergone clinical trials in various matrices and has been shown to lower "LDL" cholesterol levels safely and naturally. Building upon established partnerships with leading retailers and manufacturers across the globe, Forbes helps its customers to develop private label and branded products.
This News Release contains forward-looking statements and forward-looking information, within the meaning of applicable securities laws (collectively, "forward-looking statements"), regarding the Company's sale of its pharmaceutical assets, the potential receipt of future consideration from the sale, and the development of the Company's nutraceutical business. Forward-looking statements can be identified by forward-looking terminology such as "potential", "up to", "building upon", "helps", "further developing", "will", and similar expressions or variations thereon. Forward-looking statements are inherently uncertain, and actual results may differ materially from the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, uncertainty whether any future payments will be received by the Company as a result of the sale to Transition; uncertainty as to the Company's future organic growth or whether any M&A transactions will be achieved; the Company's need for additional future capital, which is not assured; the Company's dependence on a few existing, and its need for additional, customers; risks inherent in new product development; competition; intellectual property, product liability and insurance risks; manufacturing risks and the Company's dependency on a single manufacturer for its supplies of ReducolTM; exchange rate fluctuations; and changes in the Company's business strategy or plans. For a further discussion of these and other known risks and uncertainties affecting the Company and its business, please see our latest Annual Information Form / Form 20-F, and other documents filed by us with Canadian and U.S. securities regulatory authorities at www.sedar.com and www.sec.gov. Forward-looking statements are based on the beliefs, assumptions, and expectations of the Company's management at the time they are made, and the Company does not assume any obligation, except as required by law, to update its forward-looking statements if those beliefs, assumptions, or expectations or other circumstances should change.
ReducolTM is a trademark of Forbes Medi-Tech Inc.
For more information, please contactForbes Medi-Tech Inc.
Director, Investor Relations and Communications
Posted: August 2008